Stocks rise, biotechs rebound; oil snaps 3-day rally

S&P 500 health care index up 1.5%, in the biggest boost to the S&P 500

World stock indexes rose on Wednesday with a rebound in biotechnology shares boosting US equities, while oil prices snapped a three-day rally after US data showed a large inventory build.

The S&P 500 hit its highest in three weeks, but concern about corporate earnings just ahead of the US third-quarter reporting season kept trading choppy. Reduced profit forecasts from Adobe Systems and Yum Brands late Tuesday added to gloom about the earnings picture.

Oil prices struggled to extend their recent rally as US government data showed domestic crude inventories rose 3.1 million barrels last week, more than forecast.

The US dollar rose against the euro and the Swiss franc , while the yen gained against the dollar after the Bank of Japan left monetary policy unchanged. The dollar was last down 0.24% against the yen at 119.950 yen .

Although the Bank of Japan held off on expanding stimulus on Wednesday, expectations are growing of more support rather than less as worries mount over a global economic slowdown. This week, the International Monetary Fund again cut its global growth forecast.

The potential for more stimulus from the European Central Bank and the Bank of Japan has contributed to a backdrop of accommodative central bank policy, along with expectations that a Federal Reserve rate increase will remain on hold until 2016.

On Wall Street, the S&P 500 health care index was up 1.5%, in the biggest boost to the S&P 500, while the Nasdaq Biotech Index climbed 2% after recent steep losses.

"On days where investors are looking for fallen angels, healthcare helps fill that equation today," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "What was a drag over the past few days is now the leader."

The Dow Jones industrial average rose 122.1 points, or 0.73%, to 16,912.29, the S&P 500  gained 15.91 points, or 0.8%, to 1,995.83 and the Nasdaq Composite added 42.79 points, or 0.9%, to 4,791.15.

Energy and materials shares also rose, extending recent gains. On the downside, shares of Adobe fell 5.3% to $80.65 while Yum Brands slumped 18.8% to $67.71.

Analysts have been cutting estimates for US third-quarter earnings since the start of the quarter, and results now are forecast to have declined 4.4% from a year earlier, Thomson Reuters data showed.

But even as Citi strategists have warned that analyst earnings forecasts are too optimistic, they have backed the view that the bull market has yet to die, predicting global equities will rise 20% through the end of 2016. The market is "already pricing in" a gloomier scenario, they argued.

The pan-European FTSEurofirst 300 closed up 0.1%, while MSCI's all-country world stock index was up 1%.

Brent , the global crude oil benchmark, settled a volatile session down 59 cents at $51.33 a barrel. US crude slid 72 cents to settle at $47.81.

Brent and WTI had gained around 8%, or about $4, over the past three days, breaking above a month-long trading range.

US Treasuries prices fell, with benchmark yields hitting their highest in a week as a recovery in global stock markets and bets on more stimulus from foreign central banks pushed investors away from bonds.

Benchmark 10-year Treasuries were down 10/32 in price to yield 2.070%, up 3.5 basis points from late Tuesday. Earlier, the 10-year yield hit a one-week high of 2.086%.